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New Year’s Resolutions for Traders

Posted By Barry Ritholtz On January 7, 2007 @ 6:14 am In Apprenticed Investor,Psychology,Trading | Comments Disabled

An investor’s New Year’s resolutions, by John Magee (via Jeff Saut)

Resolved, that in the coming year:

• I will not alienate my friends and antagonize my family by reminding the world on every possible occasion how right I was about the upturn – or downturn – in steels, motors, airlines, or whatever.

• When I buy a stock I will not mobilize all the good news to make it look pretty. I will try to consider both the favorable and unfavorable angles as impartially as I know how.

• I will not close out a stock position that is doing well by me for no other reason than that I have a profit. I will not cut short my gains in a good situation.

• I will not hang on to a stock that is persistently going against me. I will limit my loss, and close out any position that seems to have gone really bad before I am in danger of serious trouble.

• I will not be swayed or panicked by news flashes, rumors, tips, or well-meant advice.

• I will not put all my eggs in one basket, nor will I be swept off my feet to plunge into some unknown or low-priced stock on a purely emotional basis.

• I will not attempt to tell the market what a stock ought to be worth. I will try to understand what the market has to tell me about what people are willing to pay for it.

• I will never forget that I am not in the market primarily to prove – to my broker, my friends, my wife, etc. – that I am smarter than everybody else, but to protect and if possible to augment my capital.

Terrific list. Thanks, Jeff!


“Resolved!?” [1]
Jeffrey Saut, Investment Strategy
Raymond James, January 4, 2007

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[1] “Resolved!?”: http://www.raymondjames.com/inv_strat.htm

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